Profit for September: Thanks to a $500 million capital infusion from Texas banker Gerald Ford, the parent company of Santa Barbara Bank & Trust yesterday posted a $5 million one-month profit for September, the first black ink the bank has seen in several years.
Officials predicted that profitability will continue, despite the overall third quarter loss of $22.9 million. Not only did the Ford purchase of 86 percent of the bank’s stock allow the bank to finally meet federal capital requirements but also permitted parent Pacific Capital Bancorp to account for its heavy load of toxic loans as to its market value, thus clearing the Ford-era books.
Therefore, September, the first month under the Ford regime, was profitable, Pacific Capital said in federal filings today. However, the parent company lost $27.9 million in July and August and $142 million so far this year.
The bank made a “return to profitability” and now exceeds federal ratios to be considered “well-capitalized,” Pacific Capital officials said. However, getting its head above water came at a heavy human price. About 300 employees were laid off over the last several years, medical benefits were slashed and dividends eliminated, depriving many bank retirees of badly needed income.